ICE 2014: CMS is running out of patience with MAOs and PDPs

clipboard_medicare_advantageAt the annual Industry Collaboration Effort (ICE) conference in San Francisco last week, the CMS audit czarina made it painfully clear that CMS is going to be turning up the heat on repeat offenders during the 2015 MA/PDP audit cycle. CMS has been using a relatively light hand with civil monetary penalties (CMPs) in recent years, with the 30 CMPs imposed this year ranging from $20,700 to $407,800.  But Tawanda Holmes (Director, Division of Audit Operations, Medicare Parts C and D Oversight and Enforcement Group) stated that will likely change in the coming year with higher fines levied against those who have repeat findings and plans with findings that CMS has widely publicized in their annual Best Practices/Common Audit Findings reports, in the areas of Part C and D appeals and grievances and formulary administration.
Having served for nearly two decades as a CMS regulator prior to consulting, I have seen CMS’ patience tested before. In prior years and previous administrations, the collective frustration over repeated findings was exacerbated by the lack of political will to take action against even the most egregious offenders.
There were myriad reasons for that, but the bottom line was that Medicare Advantage plans continued operating out of compliance, often with marked impact on beneficiaries, with little more than a glancing slap on the wrist.  We are now seeing a different regulatory environment in the health care industry, and federal regulators are poised to act.
Ms. Holmes shared several other aspects of the 2015 audit season that bear taking note.  There will likely be only one audit in the first quarter of 2015 (likely a ‘trial balloon’ for their revised 2015 protocol), with virtually all remaining audits conducted in the second and third quarters of the year.  A quiet first quarter brings good and bad news for Medicare Advantage plans.  There is a bit more time in the next three to four months to begin correcting self-identified deficiencies before being hit with an audit notice, but there will be precious little CMS audit intelligence circulating during the first quarter to help those facing an audit in the spring or early summer
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